Israeli attack on Iran shakes futures
Early Friday morning, Israel launched missile attacks into Iran, targeting nuclear infrastructure and other military capabilities. Iran’s attempts to retaliate were crushed by the magnitude of the Israeli onslaught. Oil prices shot up by 10% as the Nasdaq, S&P and Dow fell between 1 and 2%, and world markets declined by 1.5%. Fears are raised that if an Iranian blockade of the Strait of Hormuz happens, oil prices could move to above $100 per barrel. The strait is the path for 20% of the world’s oil, 21 million barrels daily. Soybean oil, another fuel, locked limit up, and gold, typically popular during military action, shot up 2%.
Platinum record, music to some investor ears
Platinum is surging with monthly prices up nearly 25% and YTD prices up 36%. The multi-use metal has outpaced both gold and silver. Investors’ concerns about tariffs and trade fluctuation look to this useful silver-gray toned element. Scarcity of the metal has affected prices with supply output down by 12% in South Africa, which yields 74% of the world’s supply.
Palladium, a member of the platinum family, is also seeing an upward move in price. Platinum is the main component in catalytic converters used in gasoline cars to reduce pollution.
President Trump has publicized his desire to return to coal as a source of energy, gasoline as a fuel for cars and a complete transition away from solar and electric cars. Speculators that anticipated President Trump’s actions to support gasoline cars rather than electric cars made a rapid, huge profit in platinum.
Wheat is much of what we eat
Fully 20% of the world’s calorie intake comes from wheat. The more than 10,000-year-old crop is used to feed humans and cattle, to produce paper and insulation and to provide livestock bedding.
The 2023/2024 world crop totaled 784.9 million tons. China is the world’s largest producer, consumer, importer and stockholder of the grain, followed by the EU, India, Russia and the U.S.
Typically both winter and summer crops are grown with the grain generally divided into hard wheat used for bread and pasta and soft wheat used for cakes and pastry. Seventy-two percent of milled grain is recovered as white flour. In the U.S., this year’s crop had the worst start in 37 years with cold weather and late planting followed by extreme heat and cold again in many places. North Dakota and Montana have suffered from drought conditions with the Pacific Northwest seeing some deterioration due to heating.
Friday’s price for July soft wheat was about 5.42 per bushel. Throughout history wheat prices have typically risen on war news.
CME midday prices: Price per bushel: July Soybeans, $10.66; July Corn, $4.43; July Wheat, $5.42. June Livestock per 100 pounds: Cattle, $225.25; Hogs, $103.50. Metals per troy ounce: August Gold, $3,451; July Silver, $36.35. July Copper per pound: $4.81. July Platinum is trading at $1,210 per ounce. July Crude oil per barrel: $73.10. The June S&P futures contract is trading at 6015.00.
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